KUNM

installment loans

Ed Williams

High interest, small dollar loans are abundant in New Mexico. Businesses offer quick cash payments for people who need money right away. But the interest rates on these loans can be as high as two thousand percent, and many people are unable to pay them off.   

This is especially true in the state's low-income communities. Statewide, storefront lending businesses outnumber fast food chain restaurants.

ChrisGoldNY via Flickr

KUNM Call In Show 3/5 8a: 

Critics say short term loans trap New Mexicans in a cycle of poverty. Often borrowers end up paying more than the amount of the loan in interest. But lending industry supporters say people who take out storefront loans know exactly what they are getting into and that there aren't other easy ways to get small loans quickly.

State lawmakers in Santa Fe are considering changes to how the storefront loan industry is regulated. Should we let the free market work it out or do New Mexicans need protection from what some call predatory lending? 

Lawmakers Blocking Loan Cap Got Industry Money

Feb 20, 2015
taberandrew via Flickr / Creative Commons License

Five of the six senators who opposed legislation to cap what lenders can charge borrowers on certain types of loans took thousands of dollars in campaign money from the industry in 2013 and 2014, state records show.

Payday Loan Cap On Hold Despite Prayers

Feb 4, 2015
ChrisGoldNY via Flickr

Despite the vocal support of a group of religious leaders, a legislative panel decided on a party-line vote Wednesday to set aside two proposals (HB 24 and HB36) that would have limited interest rates on short-term loans.

Lawmaker Wants To Cap Storefront Lending Rates

Feb 2, 2015
Daquella manera via Flickr

The average person who takes out a short-term loan borrows about $650 and pays about 340 percent interest.  But rates on payday, title and installment loans would be capped at 36 percent if reformers get their way during the 2015 legislative session.

There were 657 small loan companies in New Mexico in 2013, many charging more than 175 percent, according to a report from the state Regulation and Licensing Department.